Adverse Credit Remortgage

The adverse credit remortgage – What is it? Who is it for? Why take one out? All are good questions with even better answers for home owners with bad credit.

Don’t Wait For Foreclosure To Happen!

If you are sitting on pins at the moment thinking about the possibility of losing your home to foreclosure, then please relax for a moment. It is hard but the following might make interesting reading for you.

There is a new facility available to all property owners who might be struggling to make ends meet every month. It is called ‘Loan Modification’ and it can be the magic potion that you need right now to lift your spirits and begin your life again.

The economy has taken a beating and so have house owners who have found themselves on the backlash of every economical crisis that has hit over the last few years. Why would it be fair for you to lose your home on the back of bad decision making by the banks?

You are right it is not, so ‘Loan Modification’ is probably a good idea in your current position. It is easy to apply for one of the fore mentioned loans, all you have to do is make contact with a couple of loan modification companies and see exactly how they can help you.

What To Expect When You Enquire?

Regardless of whether you are enquiring about an adverse credit remortgage or enquiring to lower your monthly payments, you will be a benefactor of some new rulings that have been put in place to help you the homeowner.

So if someone told you that the following is possible by modifying your mortgage?

* Lower monthly payments spread over a longer period of time.

* The possibility of a reduced mortgage if your house is not worth what your current mortgage assumes.

* Lower interest rates

* Greater stability and increased security

* Getting rid of the stigma of foreclosure

* Consolidated debts with the possibility of waived late payment fees.

* No Credit Checks

* Low fees for the service.

These are obviously very encouraging sounding words, and are actually what many people are already taking

advantage of.

By searching out and applying with as many adverse credit remortgage or loan modification companies as you can, and getting an idea of how they can help you should soon be on the way to getting some much needed help.

If you have a job, have a mortgage and can prove an ability to keep up with payments, then you will have a successful application. A great tip is to try and get a second part-time job, and figure out all you monthly outgoings beforehand. That way you are armed and prepared to move forward quickly, the second job gives an added impotence to your commitment to pay your bills.

Foreclosures are rising in the USA, and repossessions in the UK. In fact, the amount of homes repossessed in the UK this year is likely to exceed 75,000 – more than double the amount in 2008. There are a number of reasons behind the rise, not least of which are the tracker mortgages which reset to higher rates after a grace period, meaning many are in houses they are unable to afford. These mortgages are similar to the Option ARM mortgages in the US, whereby a low introductory rate was offered and then the rate rose at a later date. Unfortunately the intention of many of these mortgages was to refinance the mortgage when the original reset. Oops.

House prices have fallen, the banks have all gone broke and we are seeing a return to rational lending practices. Which means anyone who had intended to refinance these mortgages, is, to use a technical term, shit out of luck. In the current market, poor credit refinancing is hardly an option. Realistically, the options for those with bad credit being able to refinance their loans are slim to none. Hence the prediction of one of the largest amounts of repossessions and foreclosure, both in the U.K. and the U.S.A. this year and next.

A great many companies offer adverse credit remortgage services. I hate to be the bearer of bad tidings, but there is no way in hell these people can live up to the promises they make. What they are looking to do is “consult,” with you – charge you a consultation fee and then inform you that there is nothing they can do. There are a good number of scams being operated in the US which basically persuade people to sign over their rights to a property, agree to rent said property and then buy it back from the “lender,” when they are back on their feet again. What happens is – the home is signed over by way of a “quit claim deed,” and the “owner,” starts paying rent to the “rescuer.”

The rescuer will then allow the foreclosure to proceed, the ex-owner will be evicted and any equity no longer belongs to the original owner because of the “quit claim.”.

The only possible way to remortgage a property in this fashion is to talk to the lender. As things get worse, which they will, there is a slim possibility the lender may write off some of the debt. It certainly doesn’t hurt to ask. Buyer beware – If it seems to good to be true. Guess what? It is.

The ongoing issues with the banking system are going to continue to cause problems for people wishing to refinance with poor credit. A recent report by The London Times points out that UK homeowner loans were paid back at a record rate in June 2009, largely thanks to the ridiculously low interest rates and falling property values. According to the Bank Of England, over £8 billion was repaid on outstanding mortgages, as people stop treating their homes as ATMs, largely down to the fact that it is all but impossible to remortgage with adverse credit currently, and even if it was not, the 100% home equity loan is a thing of the past.

Outstanding UK homeowner loans are still at record highs, and couple with a falling property market, this still puts a large proportion of the population underwater with their mortgages. No doubt, this will continue for some years as foreclosures and repossessions are still rising.

For those of us unlucky enough to be needing to refinance with bad credit, the situation will not be improving any time soon. By far the best option is to attempt to renegotiate any outstanding loans. The recent government programs to prevent the foreclosure level from continuing to rise are - at best a waste of time, and at worst - will slow down the process of recovery and turn the recession into a long, drawn out depression.